Could Online Video Viewers Benefit From TV’s Carriage Fee Wars?

Did you know there’s a carriage fee war going on? DirecTV dropped all of Viacom’s channels and had a banner running on July 11th stating that Viacom wanted consumers to pay $1B more in fees to keep the channels. Viacom for their part said that DirecTV was getting ready to drop the channels to prevent its viewers from seeing their favorite shows (tsk, tsk). At midnight, they dropped the Viacom channels and some 20 million or more are without access because they subscribe to DirecTV. Meanwhile, AMC and Dish are warring over something completely different but it resulted in 14 million people being without the AMC group programming. So, what does it all mean for online video viewers like myself?

You might recall, or not, that I cut the cord some months back. I was tired of paying $50 a month to Time Warner Cable just to watch essentially, 4 broadcast networks and 3 cable channels. Since then I’ve been filling my video entertainment needs online, for $8 a month at Hulu and some supplemental viewing at services like Koldcast.tv and YouTube. As far as I’m concerned, I got the best end of the deal. Even if I do end my boycott and add in a Netflix subscription, I’ll be up to $16 a month.

Viacom vs. DirecTV

Now, Viacom is warring with DirecTV, and this could prove even better for people like me. Clearly Viacom needs to make more money because they pay for the creation and marketing of all of their awesome reality TV shows (apply mild sarcasm there). Dish, for their part, has people paying high monthly fees to get access to all the channels but part of the problem with the price, is Viacom.

It might seem logical that if DirecTV has more subscribers, they should pay more in fees to Viacom right? But Viacom’s channels haven’t been doing all that great in the ratings game, so DirecTV is right in not wanting to pay more, right? On top of that, Viacom requires the channels be bundled together, causing channel bloat and consumers getting a ton of channels they didn’t want and will never watch (the whole reason why I cut the cord, too much crap, too much money for the crap).

For example, in my TWC subscription, there was a 5-channel package that cost me round $3 a month. Since I didn’t know what it was and never watch any of the channels, I called to get rid of it, three bucks is three bucks. When I called, they told me that if I did that my bill would go up something like $20-25 a month. Channel bloat because of packaging in full effect right there because I was essentially asking to unbundle something. I had to have those 5 channels and pay that $3 or else I would pay more. Screw you Time Warner Cable and whoever owns those channels. I dropped you all instead.

Viacom has been streaming some of its shows online for free but now, during this battle, has pulled back on some of it. To me, it shows that it really is all about the Benjamins for them. They don’t want people simply going online to get all their stuff for free. It also seems like a move to push people to switch away from DirecTV because now they can’t get it for free online and if DirecTV doesn’t pay up, they’ll switch providers.

AMC vs. Dish

AMC, who was dropped by Dish recently, said “screw you” to Dish and decided it would stream the Breaking Bad Season 5 premiere for Dish subscribers who no longer have access. It’s a one-time deal though. After that they’re expecting Dish subscribers to switch providers if they want to see the rest of the season.

Dirty Pool? Perhaps, but if Dish sees a marked drop off in subscriptions suddenly, it might prompt them to play ball. Even more dastardly, is the reason Dish dropped them, and I quote from the AMC site, “AMC Networks and DISH are not in a fee negotiation of any kind. We have not requested more money from DISH. The networks have been removed by DISH to gain leverage in an unrelated lawsuit.”

Now that is dirty pool. The AMC group includes; AMC, WE tv, IFC and Sundance Channel. That’s a group of content that I would gladly pay $5-8 a month to access online, on-demand. I mean seriously, The Walking Dead, Hell on Wheels, Mad Men not to mention all the IFC and Sundance films?

Of course, Dish says it’s all about the carriage fees and so the war continues.

Cut the Cord, Drop the D!

So both Dish and DirecTV are warring with some of the providers of their content, without whom, they have far less content. Do you think either of them have lowered the price of service because they are not carrying that content? Probably not. Yet another reason to drop them in my book.

DirecTV hates video streaming because people aren’t subscribing or watching as much because of it, say some people in the industry. Right, it’s got nothing to do with all the other stuff I’ve mentioned in this article. I mean, for my $8 I get Hulu Plus and have access to just about everything I ever watched on my $55 a month cable subscription.

As far as I’m concerned, this is all great news for those of us who want to watch all those shows from Viacom and AMC but don’t want to pay for all the channel bloat. Why? Because I think it will force the networks to rethink their approach to online and hopefully, see the value in putting together a reasonably priced online subscription for some of their content, or distributing it to places like Hulu and Netflix. Again, $5 a month for AMC, IFC and Sundance online? Hell yeah I’d pay it. $5 a month for Viacom’s 25 channels? Let’s see, MTV, VH1, Nickelodeon, BET, Logo, and Spike? No thanks. Comedy Central? I’d buy that for a dollar! Well, $1 a month I guess. Hey, don’t laugh, at 20 million subscribers, it would be $20 million a month in fees not to mention the ad revenue.

I most certainly don’t want to pay $2.99 an episode which is what many of these shows are selling for on iTunes. Now, a monthly subscription deal would be great. Plus, they could further monetize the content through video advertising, further expanding the online video presence and momentum and perhaps finally put an end to the dinosaur cable and satellite providers.

Not that I want anyone going out of business or losing their jobs. But that industry could certainly use some shaking up and this might be just the thing to do it. However, I suspect that someone like Viacom would still bundle all their crap channels up and sell combined access to them online making it all pointless. AMC, I think, would be smarter and allow you to a la carte their stuff. If they do, they can count me in as a subscriber which is more than they’re making off me right now as I just go to viewing parties and what not now to watch content.

If I were Hulu, Netflix or Amazon, I’d be paying Viacom and AMC a visit this week with a big fat check to get their new content quick. It could prove profitable in the long run if others drop Dish or DirecTV in favor of online subscriptions.

Have Something to Say? We're listening!

Want to chime in on this article? Share your thoughts with us on Facebook or Twitter.